The truth comes out about what transpired Sept 18, 2008 in the markets.

The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell The Post.

Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level – a 22 percent decline! – while the clang of the opening bell was still echoing around the cavernous exchange floor.

According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning.

The panicked selling was directly linked to the seizing up of the credit markets – including a $52 billion constriction in commercial paper – and the rumors of additional money market funds “breaking the buck,” or dropping below $1 net asset value.

The Fed’s dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt.

My friends, this is not the raving of a lunatic. Gerald Celente is a veteran trends forecaster and author. He has appeared on too many TV shows to count. I’ve put some of the info from his web site to the right so you will know he is respected in his field.

Read this carefully and reflect.

RHINEBECK, NY 9/29/2008 By Gerald Celente

The Greatest Depression has begun. Conditions will drastically deteriorate. We urge you to consider taking proactive and protective measures to secure your future before it’s too late.

The “Panic of ’08” that has gripped the financial markets is but one symptom of a much greater crisis. Empire America is collapsing. The crash is under way. Those in denial refuse to see it. Others pin their hopes on politicians, bankers and brokers to miraculously repair the irreparable.

There is no denying the economic facts and figures. While there is no turning back, there will be short-term respites. Use them wisely.

Every day the news is more dire than the day before. And it’s not only America that is crashing. As the giant falls, the earth trembles. Economic chaos, social upheaval, political strife… global markets are melting down. There are runs on banks. Wars, hot and cold; rage and simmer. The proof is everywhere.

Too Big to Drown

In America, political insiders and the economic high and mighty know the ship is sinking. As they ready the lifeboats to save themselves, they keep assuring the worried masses they know what to do to keep the ship of state afloat.

Do you believe the captain? Do you believe the crew? These are the people that ignored the warning signals and willfully charted the course toward destruction. Are they going to save you? Us?

Will Washington put your interests above their special interests? Who do you look up to with a greater mind than yours? Bush, Paulson, Bernanke, McCain, Obama, Dodd, Reid, Pelosi, Frank, Laurel, Hardy?

By their deeds you shall know them. They are committed to saving the “too-big-to-fails” while leaving the “too-small-to-save” to save themselves.

Know where the exits are. Make sure you can find your way to the lifeboats. Understand that at a certain point, the hatches will be closed, and under the “rules” of government, only first class passengers will have guaranteed seats.

Psychotic September

The pillars of America’s financial system were destroyed when the Twin Towers were toppled on 9/11.

The foundation of America’s free market capitalism were destroyed when an Economic 9/11 took out Merrill Lynch, Lehman Brothers and A.I.G…. the world’s largest investment banks, brokerages and insurance companies. Yet, despite the deafening sound, when the biggest bank failure in US history happened several days later, it barely made the headlines that Washington Mutual, with 2,300 branches and $310 billion of assets, had gone under.

As we write this, Wachovia, the sixth largest bank in the US, is being gobbled up by the imperiled Citigroup.

Do you need more proof?

Today the Dow plunged 778 points.

We are facing a crisis of unparalleled proportions. You must also rely on your own wits and good judgment. No one will save you but yourself.

A few days ago Project Camelot contacted George Green to get his thoughts about the current economic crisis. I took notes. [You can download the 42-minute talk here.]

-George expects we’ll see the DOW at 8500 shortly.
-China’s military has said if the dollar collapses they will consider it an act of war.
-He says WW III is ready to go and is a key part of the Hidden Powers goal to achieve massive population reduction across the planet.
–WW III will start within six months (possibly October) and last 4 years 3 months.
-Their goal is to reduce US population from 300 million to 20 million (90+% reduction)
-There will be a large west coast earthquakeBEFORE WW III starts.
-The earthquake will destroy a dam near Sacramento, CA. Southern California will then experience widespread water shortages.
-Expect fresh produce to go up 40% at the supermarket within 90 days.

He was asked what “the little guy” should do…

George said “stock up on food and convert your dollars into assets NOW.” For example, if you have old appliances buy new ones. He said a collapse of the nationwide distribution infrastructure will result in shortages of food and consumer goods. Dollars will become worthless. Physical goods can be bartered.

He said he had a private lunch with an unnamed Congressman on Sept 18. (George is quite wealthy and can swing these meetings.) The Congressman said “In six months you won’t recognize the American currency.”

This comment was most chilling to me.

Sounds like the Amero may be on the way soon. Of course, that won’t happen without the total destruction of the dollar; it’ll have to fall in value so far it’ll be worth more as kitty litter than legal tender.

When asked what he personally is planning to do he said he will be moving to an estate he bought in Ecuador soon. He has just finished liquidating all his real estate holdings in preparation.

About George: I’ve listened to all his presentations on YouTube and Project Camelot for over a year. He doesn’t seem to have a personal agenda; he seems to genuinely want to help people. He’s a multi-millionaire who “ran with the big boys” in the 70s and 80s until they turned on him over his refusal to be the campaign finance chairman for Jimmy Carter’s presidential run. He has been heavily into real estate and was responsible for building most of the Village Inn restaurants.

In 2003 Warren Buffet proclaimed, “Derivatives are financial weapons of mass destruction.”
They are the root cause of the coming Great Depression 2.0.

To celebrate the inevitible collapse of Wachovia today I’ve updated my list of the top 25 banks in the US with the largest exposure to toxic derivatives. I’ve added the current bank ratings from The Street to help you guage how much trouble each is in.

[click to enlarge]

Three of these top 25 banks have now failed.
In my estimation two more are on life support. Altogether, about half are in bad shape.

Of course, the worst offender on the list remains JPMorgan Chase. I now believe they will never fail as they are the Fed’s “Fair-Haired Golden Boy.” [see post]

As our hero Jim Sinclair suggests, keep enough money in the bank for 6 months expenses and put the rest into physical gold [and silver] or US Treasuries.

The Dow Jones Industrial Average slid 778 points for its biggest point drop ever as $1.2 trillion in market value was erased from American equities.

Wachovia Corp. tumbled 82 percent after the bank was sold to Citigroup Inc. in a deal brokered by the Federal Deposit Insurance Corp., sending shares of Sovereign Bancorp Inc. down 72 percent and National City Corp. 63 percent lower.

Goldman Sachs Group Inc. and Morgan Stanley, the two largest Wall Street securities firms, fell more than 12 percent.

A member of Congress declared Sunday that the Speaker of the House (Nancy Pelosi) has declared martial law.

Rep. Michael Burgess (R-TX) reports from the floor of the House that the Republicans have been cut out of the process and called unpatriotic for not blindly supporting the fraudulent bailout. He says the only debate has been about what talking points to use on the American people. The most ominous revelation is when he claims the Speaker has declared martial law.

“I have been thrown out of more meetings in this capital in the last 24 hours than I ever thought possible, as a duly elected representative of 825,000 citizens of north Texas.” Said Congressman Burgess.

Burgess asks the Speaker of the House to post the bailout bill on the internet for at least 24 hours instead of passing the largest piece of legislation in US financial history in the “dark of night.”

The most frightening part of Rep. Burgess’ one-minute floor speech is when he says, “Mr. Speaker I understand we are under Martial Law as declared by the speaker last night.”

I have no more info at this time.

But remember, though, the US Military’s NorthCom is deploying troops stateside on Wednesday:

The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys. Now they’re training for the same mission — with a twist — at home.

Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.
[more]

UPDATE: “Legislative” martial law was declared Saturday by Nancy Pelosi. This affects only Congress. It suspends the normal procedures and safeguards and allows the House Leadership to operate in a more authoritarian fashion. It enables the Leadership to seek to ram a bill through before the Members have the opportunity to fully understand what they are voting on.